Hong Kong: Stocks soar 3.67% at lunch

[HONG KONG] Hong Kong stocks soared 3.67 per cent in the morning session, with mainland investors using a cross-border investment tie-up with Shanghai to pile into the market.

Hong Kong's benchmark Hang Seng Index surged 962.37 points to 27,199.23 by lunch on turnover of HK$183.42 billion (S$32.1 billion).

However, mainland shares were down sharply on profit-taking. The benchmark Shanghai Composite Index dropped 1.24 per cent, or 49.57 points, to 3,945.24.

The Shenzhen Composite Index, which tracks stocks on China's second exchange, plunged 2.06 per cent, or 43.48 points, to 2,065.55.

The HSI soared 3.80 per cent on Wednesday following a long holiday weekend.

While the Shanghai-Hong Kong Stock Connect was initially met with scant interest, mainland authorities' decision last month to expand the number of domestic fund-management firms allowed to buy stocks in Hong Kong has seen activity surge.

The southern city's index is following a surge in Shanghai, which has almost doubled over the past year as retail investors place bets - mostly with borrowed cash - on China's government unveiling further monetary easing measures to boost the economy.

The central bank has already cut interest rates twice since November, while Premier Li Keqiang last month suggested the government had the weapons to support growth if necessary.

AFP